The following data are for the two products produced by Tadros Company.
| Product A | Product B | ||||
| Direct materials | $ | 15 per unit | $ | 26 per unit | |
| Direct labor hours | 0.5 DLH per unit | 1.5 DLH per unit | |||
| Machine hours | 0.4 MH per unit | 1.1 MH per unit | |||
| Batches | 125 batches | 250 batches | |||
| Volume | 10,000 units | 2,000 units | |||
| Engineering modifications | 10 modifications | 50 modifications | |||
| Number of customers | 500 customers | 400 customers | |||
| Market price | $ | 36 per unit | $ | 95 per unit per unit | |
The company’s direct labor rate is $20 per direct labor hour (DLH). Additional information follows.
| Costs | Driver | |||
| Indirect manufacturing | ||||
| Engineering support | $ | 23,500 | Engineering modifications | |
| Electricity | 24,800 | Machine hours | ||
| Setup costs | 41,000 | Batches | ||
| Nonmanufacturing | ||||
| Customer service | 72,000 | Number of customers | ||
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Indicated with minus sign.) Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. Activity Plantwide OH Cost per unit erhead Assigned OH rate Total Overhead Cost Units Produced Driver Product A Product B Product A Product B 1.2 What is the gross profit per unit? Product A Product B Market price Gross profit per unit 2.1 How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead Product A Product B Gross profit per unit Units purchased per customer Gross profit per customer 2.2 What is the cost of providing customer service to each customer? s the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? Product A Product B Gross profit per customer Customer service cost per customer Profit (loss) per customer s the profit adequate?
